I. Energy Costs (Second largest expense; primarily electricity)

1. Electricity Rate Standards

There is a price difference between industrial electricity rates in industrial parks and agricultural rates for individual rural users.

2. Production Line Configuration (Drying vs. No Drying)

Crushing and pelletizing only (no drying): 70–90 kWh per ton;

Full production line with rotary dryer: 110–160 kWh per ton (the dryer is a major energy consumer).

3. Equipment Age and Efficiency

Older crushers and pellet mills suffer from high energy consumption and low output; electricity consumption per unit of product is 15%–25% higher than that of new, high-efficiency equipment.

II. Equipment Wear and Depreciation Costs

1. Wear-and-Tear Parts

Dies, pressure rollers, hammer blades, screens, and lubricants represent ongoing expenses; wood-based raw materials cause less wear, whereas straw causes double the wear; high impurity levels in raw materials accelerate wear.

2. Production Line Economies of Scale

Small-scale 1-ton line: High depreciation allocation per unit;

Medium-scale 3–5 ton fully automated line: High output spreads out depreciation costs;

Large-scale plants (annual output >10,000 tons): Depreciation costs can be reduced by approximately another 30%.

3. Equipment Maintenance and Repair

Inadequate maintenance and frequent breakdowns lead to additional costs for replacement parts, while simultaneously reducing daily output and driving up unit costs.